Bank of Baroda raises $500 million syndicated term loan

Bank of Baroda has raised a $500 million five-year syndicated term loan facility through its IFSC Banking Unit located at GIFT City. The transaction marks the bank’s return to the global syndicated loan market after a gap of one year.

According to the bank, the proceeds from the loan will be utilised for general banking and corporate purposes. In the deal, MUFG Bank and HSBC acted as Mandated Lead Arrangers, Underwriters, and Bookrunners.

What is a Syndicated Loan?

A syndicated loan is a financing arrangement in which a group of lenders (called a syndicate) jointly provide funds to a single borrower. The borrower may be a corporation, large infrastructure project, or sovereign government.

Key Features

• Risk Sharing: The loan amount is distributed among multiple lenders, reducing the risk for any single institution.
• Large Financing: Used when the funding requirement exceeds the capacity of a single lender.
• Specialised Expertise: Allows participation of banks with expertise in particular asset classes or sectors.
• Flexible Structure: Interest rates may be fixed or floating, and the facility may include a fixed loan amount or a line of credit.
• Versatile Use: Often used for large corporate financing, infrastructure projects, or corporate buyouts.
• Amendable Terms: Loan terms can be restructured or revised by amending the loan documents.

Source: TH & Others